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Corporate Investments And Funds Held For Clients
 12 Months Ended
Jun. 30, 2018
Corporate Investments And Funds Held For Clients [Abstract]  
Corporate Investments And Funds Held For Clients
NOTE 6. CORPORATE INVESTMENTS AND FUNDS HELD FOR CLIENTS

Corporate investments and funds held for clients at June 30, 2018 and 2017 were as follows:
 
 
June 30, 2018
 
Amortized
Cost
 
Gross
Unrealized
 Gains
 
Gross
Unrealized
Losses
 
 Fair Value (A)
Type of issue:
 
 
 
 
 
 
 
Money market securities, cash and other cash equivalents
$
6,542.1

 
$
—

 
$
—

 
$
6,542.1

Available-for-sale securities:
 

 
 

 
 

 
 

Corporate bonds
9,819.4

 
20.3

 
(160.9
)
 
9,678.8

Asset-backed securities
4,555.5

 
0.3

 
(64.1
)
 
4,491.7

U.S. government agency securities
2,787.0

 
4.0

 
(47.7
)
 
2,743.3

U.S. Treasury securities
2,678.9

 
0.4

 
(76.9
)
 
2,602.4

Canadian government obligations and
Canadian government agency obligations
1,109.0

 
0.4

 
(20.6
)
 
1,088.8

Canadian provincial bonds
724.5

 
5.1

 
(7.4
)
 
722.2

Municipal bonds
584.6

 
3.2

 
(4.3
)
 
583.5

Other securities
873.0

 
3.0

 
(10.5
)
 
865.5

 
 
 
 
 
 
 
 
Total available-for-sale securities
23,131.9

 
36.7

 
(392.4
)
 
22,776.2

 
 
 
 
 
 
 
 
Total corporate investments and funds held for clients
$
29,674.0

 
$
36.7

 
$
(392.4
)
 
$
29,318.3


(A) Included within available-for-sale securities are corporate investments with fair values of $10.5 million and funds held for clients with fair values of $22,765.7 million. All available-for-sale securities are included in Level 2 of the fair value hierarchy.
 
June 30, 2017
 
Amortized 
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Fair Value (B)
Type of issue:
 

 
 

 
 

 
 

Money market securities, cash and other cash equivalents
$
8,181.6

 
$
—

 
$
—

 
$
8,181.6

Available-for-sale securities:
 

 
 

 
 

 
 

Corporate bonds
9,325.3

 
98.8

 
(22.0
)
 
9,402.1

Asset-backed securities
4,453.1

 
16.9

 
(8.6
)
 
4,461.4

U.S. government agency securities
3,557.7

 
22.2

 
(13.4
)
 
3,566.5

U.S. Treasury securities
1,585.9

 
2.6

 
(14.3
)
 
1,574.2

Canadian government obligations and
Canadian government agency obligations
1,053.6

 
2.9

 
(11.4
)
 
1,045.1

Canadian provincial bonds
746.9

 
14.3

 
(1.4
)
 
759.8

Municipal bonds
582.5

 
11.3

 
(1.3
)
 
592.5

Other securities
493.6

 
7.3

 
(1.4
)
 
499.5

 
 
 
 
 
 
 
 
Total available-for-sale securities
21,798.6

 
176.3

 
(73.8
)
 
21,901.1

 
 
 
 
 
 
 
 
Total corporate investments and funds held for clients
$
29,980.2

 
$
176.3

 
$
(73.8
)
 
$
30,082.7


(B) Included within available-for-sale securities are corporate investments with fair values of $10.8 million and funds held for clients with fair values of $21,890.3 million. All available-for-sale securities were included in Level 2 of the fair value hierarchy.

For a description of the fair value hierarchy and the Company's fair value methodologies, including the use of an independent third-party pricing service, see Note 1 "Summary of Significant Accounting Policies." The Company did not transfer any assets between Levels during fiscal 2018 or 2017. In addition, the Company concurred with and did not adjust the prices obtained from the independent pricing service. The Company has no available-for-sale securities included in Level 1 or Level 3 as of June 30, 2018.

The unrealized losses and fair values of available-for-sale securities that have been in an unrealized loss position for a period of less than and greater than 12 months as of June 30, 2018, are as follows: 
 
June 30, 2018
 
Securities in unrealized loss position less than
12 months
 
Securities in unrealized loss position greater than 12 months
 
Total
 
Gross Unrealized
Losses
 
Fair Market
Value
 
Gross Unrealized
Losses
 
Fair Market
Value
 
Gross
Unrealized
Losses
 
Fair
Market Value
Corporate bonds
$
(118.2
)
 
$
7,132.9

 
$
(42.7
)
 
$
994.2

 
$
(160.9
)
 
$
8,127.1

Asset-backed securities
(47.4
)
 
3,515.9

 
(16.7
)
 
867.7

 
(64.1
)
 
4,383.6

U.S. government agency securities
(31.2
)
 
2,013.8

 
(16.5
)
 
431.1

 
(47.7
)
 
2,444.9

U.S. Treasury securities
(46.9
)
 
1,676.8

 
(30.0
)
 
864.0

 
(76.9
)
 
2,540.8

Canadian government obligations and
Canadian government agency obligations
(20.6
)
 
1,020.3

 
—

 
—

 
(20.6
)
 
1,020.3

Canadian provincial bonds
(6.3
)
 
387.7

 
(1.1
)
 
50.4

 
(7.4
)
 
438.1

Municipal bonds
(3.6
)
 
285.8

 
(0.7
)
 
16.0

 
(4.3
)
 
301.8

Other securities
(9.2
)
 
573.3

 
(1.3
)
 
33.4

 
(10.5
)
 
606.7

 
$
(283.4
)
 
$
16,606.5

 
$
(109.0
)
 
$
3,256.8

 
$
(392.4
)
 
$
19,863.3


The unrealized losses and fair values of available-for-sale securities that have been in an unrealized loss position for a period of less than and greater than 12 months as of June 30, 2017 are as follows: 
 
June 30, 2017
 
Securities in unrealized loss position less than
12 months
 
Securities in unrealized loss position greater than 12 months
 
Total
 
Gross Unrealized
Losses
 
Fair Market
Value
 
Gross Unrealized
Losses
 
Fair Market
Value
 
Gross
Unrealized
Losses
 
Fair
Market Value
Corporate bonds
$
(22.0
)
 
$
2,619.9

 
$
—

 
$
7.4

 
$
(22.0
)
 
$
2,627.3

Asset-backed securities
(8.5
)
 
1,916.1

 
(0.1
)
 
11.3

 
(8.6
)
 
1,927.4

U.S. government agency securities
(13.4
)
 
1,935.3

 
—

 
—

 
(13.4
)
 
1,935.3

U.S. Treasury securities
(14.3
)
 
1,317.8

 
—

 
1.0

 
(14.3
)
 
1,318.8

Canadian government obligations and
Canadian government agency obligations
(11.4
)
 
699.6

 
—

 
—

 
(11.4
)
 
699.6

Canadian provincial bonds
(1.4
)
 
179.8

 
—

 
—

 
(1.4
)
 
179.8

Municipal bonds
(1.2
)
 
98.8

 
(0.1
)
 
1.2

 
(1.3
)
 
100.0

Other securities
(1.3
)
 
148.0

 
(0.1
)
 
8.9

 
(1.4
)
 
156.9

 
$
(73.5
)
 
$
8,915.3

 
$
(0.3
)
 
$
29.8

 
$
(73.8
)
 
$
8,945.1


    
At June 30, 2018, Corporate bonds include investment-grade debt securities, with a wide variety of issuers, industries, and sectors, primarily carry credit ratings of A and above, and have maturities ranging from July 2018 through May 2026.

At June 30, 2018, asset-backed securities include AAA rated senior tranches of securities with predominately prime collateral of fixed-rate credit card, auto loan, equipment lease and rate reduction receivables with fair values of $2,033.6 million, $1,784.4 million, $472.0 million, and $201.7 million, respectively.  These securities are collateralized by the cash flows of the underlying pools of receivables.  The primary risk associated with these securities is the collection risk of the underlying receivables.  All collateral on such asset-backed securities has performed as expected through June 30, 2018.
    
At June 30, 2018, U.S. government agency securities primarily include debt directly issued by Federal Home Loan Banks and Federal Farm Credit Banks with fair values of $1,889.5 million and $628.0 million, respectively. U.S. government agency securities represent senior, unsecured, non-callable debt that primarily carry ratings of Aaa by Moody's and AA+ by Standard & Poor's with maturities ranging from September 2018 through March 2026.
    
At June 30, 2018, other securities and their fair value primarily represent: U.S. government agency commercial mortgage-backed securities of $298.2 million issued by Federal National Mortgage Association ("Fannie Mae") and Federal Home Loan Mortgage Corporation ("Freddie Mac"), Aa2 rated United Kingdom Gilt securities of $198.8 million, AAA and AA rated supranational bonds of $141.3 million, and AAA and AA rated sovereign bonds of $110.3 million.

Classification of corporate investments on the Consolidated Balance Sheets is as follows:
June 30,
 
2018
 
2017
Corporate investments:
 
 
 
 
Cash and cash equivalents
 
$
2,170.0

 
$
2,780.4

Short-term marketable securities (a)
 
3.3

 
3.2

Long-term marketable securities (b)
 
7.2

 
7.6

Total corporate investments
 
$
2,180.5

 
$
2,791.2


 
(a) - Short-term marketable securities are included within Other current assets on the Consolidated Balance Sheets.
(b) - Long-term marketable securities are included within Other assets on the Consolidated Balance Sheets.

Funds held for clients represent assets that, based upon the Company's intent, are restricted for use solely for the purposes of satisfying the obligations to remit funds relating to the Company’s payroll and payroll tax filing services, which are classified as client funds obligations on our Consolidated Balance Sheets.

Funds held for clients have been invested in the following categories:
June 30,
 
2018
 
2017
Funds held for clients:
 
 
 
 
Restricted cash and cash equivalents held to satisfy client funds obligations
 
$
4,372.1

 
$
5,401.2

Restricted short-term marketable securities held to satisfy client funds obligations
 
2,521.4

 
2,918.5

Restricted long-term marketable securities held to satisfy client funds obligations
 
20,244.3

 
18,971.8

Total funds held for clients
 
$
27,137.8

 
$
27,291.5



Client funds obligations represent the Company's contractual obligations to remit funds to satisfy clients' payroll, tax and other payee payment obligations are recorded on the Consolidated Balance Sheets at the time that the Company impounds funds from clients.  The client funds obligations represent liabilities that will be repaid within one year of the balance sheet date.  The Company has reported client funds obligations as a current liability on the Consolidated Balance Sheets totaling $27,493.5 million and $27,189.4 million as of June 30, 2018 and 2017, respectively.  The Company has classified funds held for clients as a current asset since these funds are held solely for the purposes of satisfying the client funds obligations.  Of the Company’s funds held for clients at June 30, 2018, $24,242.9 million are held in the grantor trust. The liabilities held within the trust are intercompany liabilities to other Company subsidiaries and eliminate in consolidation.

The Company has reported the cash flows related to the purchases of corporate and client funds marketable securities and related to the proceeds from the sales and maturities of corporate and client funds marketable securities on a gross basis in the investing section of the Statements of Consolidated Cash Flows.  Beginning September 30, 2017, as a result of the adoption of ASU 2016-18 (see Note 1), the Company has reported the cash and cash equivalents related to client funds investments with original maturities of ninety days or less, within the beginning and ending balances of cash, cash equivalents, restricted cash, and restricted cash equivalents. These amounts have been reconciled to the Consolidated Balance Sheets on the Statements of Consolidated Cash Flows. Refer to Note 1 for a summary of the change in presentation as a result of the adoption of ASU 2016-18. The Company has reported the cash flows related to the cash received from and paid on behalf of clients on a net basis within net increase in client funds obligations in the financing activities section of the Statements of Consolidated Cash Flows.

Approximately 80% of the available-for-sale securities held a AAA or AA rating at June 30, 2018, as rated by Moody's, Standard & Poor's, DBRS for Canadian denominated securities, and Fitch for asset-backed and commercial mortgage backed securities. All available-for-sale securities were rated as investment grade at June 30, 2018.

Expected maturities of available-for-sale securities at June 30, 2018 are as follows:
One year or less
$
2,524.7

One year to two years
5,110.2

Two years to three years
5,533.9

Three years to four years
3,798.0

After four years
5,809.4

 
 

Total available-for-sale securities
$
22,776.2